Does ClearOne Inc (NASDAQ:CLRO) Have A Place In Your Dividend Portfolio?
Dividends can be underrated but they form a large part of investment returns, playing an important role in compounding returns in the long run. ClearOne Inc (NASDAQ:CLRO) has returned to shareholders over the past 3 years, an average dividend yield of 2.00% annually. Should it have a place in your portfolio? Let’s take a look at ClearOne in more detail. Check out our latest analysis for ClearOne
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Can it afford to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does ClearOne fare?
ClearOne has a negative payout ratio, which means that it is loss-making, and paying its dividend from its retained earnings. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Unfortunately, it is really too early to view ClearOne as a dividend investment. It has only been consistently paying dividends for 3 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, ClearOne generates a yield of 3.28%, which is high for Communications stocks.
Next Steps:
After digging a little deeper into ClearOne’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three key aspects you should look at:
1. Future Outlook: What are well-informed industry analysts predicting for CLRO’s future growth? Take a look at our free research report of analyst consensus for CLRO’s outlook.
2. Historical Performance: What has CLRO’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
